Corporate Governance in Bahrain

Abstract

Corporate governance is developing rapidly in many countries across the world. In this paper we analyse the existing state of corporate governance in a country in the Middle East: Bahrain. We employ a survey methodology, with a questionnaire being sent to all of the companies listed on the Bahrain Stock Exchange Market. An analysis of the responses reveals that Bahraini companies have in place some of the features of corporate governance best practice with boards dominated by non–executive directors, for example, and the separation of the roles of Chair and CEO. However, it is not clear how effective the nomination/appointments process is and directors tend to be fairly entrenched. In terms of risk management and control, the majority of Bahraini companies have an internal audit department and risk management control. Overall, it seems that Bahraini companies have a number of key corporate governance structural features in place, but that there remains further progress to be made.